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A logistical challenge

Third party logistics is in state of rapid transition. So what effect is this having on talent needs?

08 Nov 2016

The traditional image of logistics is a truck driver thundering down the motorway or a ship laden with containers gliding out to sea.

It’s still true of course but today’s world of logistics is also becoming increasingly automated and technologically sophisticated. It is a sector utilising the benefits of vehicle tracking technology and robotic devices helping to pack and load trucks. It is one with an increasingly focused eye on a future which will see driverless vehicles and drone deliveries.

The true pioneers of these developments are not one-man haulage firms, but global 3PL or third party logistics carriers.

These are the groups (see box out) which operate their own or customer fleets and are responsible for shipping goods from manufacturers and distributors to shops or directly to customers in their homes or offices anywhere in the world.

So what impact is this fast changing sector having on senior talent needs?

"Having the ability to think outside of the box is one of the important traits of a good manager"

Ajit Venkataramanan, Managing Director of APM Terminals India, says robots and automation are increasingly crucial to 3PLs. Adds Venkataramanan: “Senior management need to have a technical mindset. With increased competition in the 3PL space, the product offerings are getting commoditised and this is forcing companies to innovate and offer new and better solutions to customers.

“Having the ability to think outside of the box is one of the important traits of a good manager. I think the last mile delivery is likely to be revolutionised by drones so tracking the innovations happening in 3PL is crucial.”

Doug Harrison, President and Chief Executive of Ontario, Canada’s VersaCold Logistics Service, agrees: “Technological data in a 3PL is as vital as the movement of the product. In terms of automation it is not just about mechanics but to be able to automate decisions about service levels or synergies. We spend a lot of time in ensuring that we have a very capable IT group,” he explains.

But these skills, he argues, are just part of a gradual evolvement in 3PL senior management talent in the last decade.

“Supply chain used to be about just transportation and was a fairly back-room concept. But now it is seen as a key competitive weapon in a business and in the boardroom.”

“The supply chain has really evolved to more of a professional designate role inside a company,” he states. “Supply chain used to be about just transportation and was a fairly back-room concept. But now it is seen as a key competitive weapon in a business and in the boardroom.” That has meant hiring from new sources such as MBA graduates, supply chain graduates, finance professionals and those from a technological, operational or engineering background.

Adds Harrison: “They may not have direct supply chain experience but their talent brings a whole lot of other experience and different innovative thoughts which we need in this faster, more advanced sector. We want people who like continuous learning and who are curious to analyse the complex metrics and processes such as weather-related impacts on logistics, global challenges and cultural interactions. It takes time to find it but it is worth it. The talent gives you the competitive advantage in a services-orientated business.”

Perry Watts, Chief Executive of DHL Supply Chain in UK & Ireland, says the need for sector expertise continues to grow. “The drive for new blood is both through sector and solution experience. For example, we are now delivering airline business solutions such as catering and supplies and for that we have looked for people who have relevant sector experience that can be blended with a logistical approach,” he states. “We have been innovative in carving out new niche markets as well as our core logistics activities and we need to find the relevant talent to help us. We do change for a living and if you can’t cope with that then you are not for us. Continuous improvement is at the heart of all that we do and where value for our customers is created.”

Another example of this change is DHL’s growing co-packing service for manufacturers. “You are adding value to a product before dispatching. You need more manufacturing type skills to manage that,” he explains.

Odgers Berndston’s sector wide experience offers 3PL firms the best chance of finding this diverse talent. Zoe Lewis, Partner, Support Services, who specializes in the sector, says: “Having supported this sector for many years, we understand the challenges they face and their new requirements such as needing more commercial acumen. Odgers Berndtson is not a boutique operation; we have multiple practices such as retail, life sciences and manufacturing. This bandwidth enables us to find the very best candidates from other sectors and convince them to join the 3PL world.”

This last point is particularly important. Lewis says the logistics industry does not have a ’sexy image’. She states: “This sector is earthy with few airs and graces, but it lacks profile; which is ironic given that it is a global, highly complex multi-billion dollar industry. But for those working outside of the sector, many do not regard the logistics industry as their next obvious career move. When highlighting for candidates the value they can bring many do see the appeal.”

This also extends to attracting the next generation of leaders into the sector – the university graduates. “The growth of technology in logistics can be an important factor. Promoting the use of drones and robotics reveals to them that 3PL can be a ‘cool’ place to work in,” she adds.

Mark Simmons, UK HR Director at XPO Logistics Europe, adds: “Growing competition, the challenges of e-commerce and the drive for innovation means the commercial demands of the sector are greater. But there is a lack of awareness about how rapidly 3PL is changing. We are creating better links with education. We are telling school pupils about the opportunities we offer in sponsored degrees and modern apprenticeships.”

Adds Lewis. “Our clients are no longer looking for the best in the local market, they want the best talent that Europe offers. So our strong international reach helps.”

Venkataramanan maintains APM is thinking globally because most of its customers are MNCs. “They are expecting the same standards of service as any other part of the world. Managers have to interact with customers in various parts of the globe. To meet their expectations, we need managers who have a global mindset to understand the customer needs.”

But he argues it can be a challenge to attract outside talent into the sector: “Companies that have global operations have been able to add value and motivation by offering international assignments and exposure to global ways of working. That’s more challenging for many of the 3PL companies here who are local or family firms.”

It sounds like modern senior managers in 3PL are being distanced from trucks on the motorway and ships at sea. Watts begs to differ: “It’s a well-rounded individual we need. One who uses his or her head with digital skills and analysis but also has plenty of heart and guts.”